Tag: hit&run

Shannon Otto took on thousands of dollars in student loan debt to pay for nursing school before an unexpected medical issue left her unable to work for more than a year. While she was recovering, her loan payments lapsed into default.

When Otto was ready to go back to work, she got more bad news: The state of Tennessee had revoked her nursing license, leaving her unable to work legally in the field she’d spent years mastering. Getting her license restored would require an additional payment of $1,500.

In 20 states, government agencies can revoke driver’s licenses, hunting licenses, and (most importantly) occupational licenses simply because the license-holders fall behind on student loan payments, according to an investigation published last week by The New York Times. Tennessee is one of the most aggressive states when it comes to delicensing student loan deadbeats: The Times says officials there reported more than 5,400 people to professional licensing agencies between 2012 and 2017.

“It’s an attention-getter,” Peter Abernathy, chief aid and compliance officer for the Tennessee Student Assistance Corporation, told the Times. “They made a promise to the federal government that they would repay these funds. This is the last resort to get them back into payment.”

Losing your job because the state government revokes a mandatory occupational license is certainly an “attention-getter.” But student lenders aren’t ultimately seeking attention; what they want is their money. And they’re a lot less likely to get it if a borrower suddenly loses his or her job.

Getting an occupational license can be a significant investment, and not only for people in highly skilled professions such as nursing. On average, licensing laws require more than a year of schooling, according to a newly updated report from the Institute for Justice, a libertarian law firm that challenges onerous licensing requirements. Becoming a cosmetologist can require up to 900 days of school in some states, and various types of construction licenses routinely require more than 1,000 days of training. Those classes aren’t cheap.

The federal government is partially to blame for these state-level policies. In 1990, the Department of Education recommended that states “deny professional licenses to defaulters until they take steps to repayment.” That year defaulted student loans totaled about $7.8 billion. Last year the figure topped $32 billion.

Some state lawmakers understand how counterproductive this practice is. A law passed last year in Montana prohibits the state from revoking licenses over unpaid student loans. State Rep. Daniel Zolnikov (R-Billings), who sponsored the bill, noted to the Times that lenders have plenty of other options when it comes to getting borrower to make payments. They can be punished “with credit scores dropping, being traced by collection agencies, just having liens,” he pointed out.

“The free market has a solution to this already,” Zolnikov told the Times. “What is the state doing with this hammer?”

Here’s something you might not know: When you see your favorite Reason reporters and editors on television, we’re probably not getting paid.

Talking head TV is essentially a parasite—no, let’s say symbiote—on the fact-finding and analysis of publications like Reason. Which means that if you want to see a friendly face and well-reasoned argument once in a while on your 55-inch 4k screen, you should consider donating to Reason. Your gift helps us become the kind of well-informed experts that TV producers can ask to convey absoluely everything they know to viewers in 15 seconds or less.

When Peter Suderman’s happy little face pops up on MSNBC Saturday afternoon, dropping some wisdom about the latest health care bill, he’s doing it for nada.

When Robby Soave’s blond swoosh shows up every week on S.E. Cupp Unfiltered on HLN, he’s not getting a dime.

When every darn one of us blows through the Kennedy set on Fox Business (thanks Kennedy!) we’re getting zero smackeroos.

When Matt Welch hosts his own TV show, The Independents, on Fox Business for a while…oh wait, he did get paid for that. But he doesn’t get paid for the hard labor he puts in at 30 Rock and Fox HQ every darn day on the mean streets of Manhattan.

What we do get is the chance to preach the gospel of free minds and free markets to new audiences, and inject some pragmatic libertarianism into the 24-hour news cycle. But getting Reasoners TV-ready—intellectually and physically—ain’t cheap.

And sure, sometimes a TV segment can make you feel like this:

Or like this:

Occasionally like this:

But more often than not, if you put Reasoners in front of a camera, we’ll manage to make the case for more freedom and more fun, a rarity in a world gone mad over red-blue turf wars and partisan point scoring:

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Securing the votes to pass a tax bill has always presented a dilemma for Republicans: On the one hand, they want to advertise the plan as a broad tax cut, and appeal to legislators who simply want to cut taxes and not worry about the budgetary effects. On the other hand, they want to avoid the appearance of raising the deficit too much in order to appease the party’s deficit hawks. In its current form, the bill would raise the deficit by about $1.4 trillion over the next decade.

The strategy so far has been to pack the bill with budget gimmicks, like setting all of the individual tax cuts to expire in a decade (even while suggesting that they won’t really go away), and to argue that the tax cuts will create sufficient economic growth to produce offsetting revenue, keeping the deficit in check.

The problem with this strategy is that the budget gimmicks are fairly transparent, and even the most favorable projections show that economic growth will only make up for a fraction of the lost revenue. So the party’s deficit hawks have begun to wonder: What if the growth doesn’t materialize, and the deficit balloons as a result?

In hopes of assuaging these concerns, party leaders appear to be negotiating what some see as a potential solution: a trigger mechanism that would raise taxes if government revenue falls too far and the deficit explodes as a result.

Deficit triggers have a long history in budget politics. In theory, a trigger acts as an accountability measure by offering a backstop against debt increases. In practice, it’s a gimmick that almost certainly wouldn’t work, and might backfire even if it did.

No details have been released so far, but the basic idea is to install a provision that would raise taxes automatically if certain growth targets aren’t met. Roll Call reports that it could result in up to $350 billion in tax increases in 2022.

There are a number of ways this could go wrong. A trigger would inject uncertainty into a tax overhaul that is supposed provide more certainty about the tax code. In addition, raising taxes during a time of sluggish economic performance has the potential to depress it even further. But that is exactly what the trigger would do by forcing automatic tax increases if the economy slowed down. It would hit businesses with a heavier tax burden at a moment when they were already hurting.

Or at least that’s what would happen if the trigger tax hike actually went into effect, which it probably wouldn’t. To understand why, it helps to look back to the last time Congress considered a deficit trigger, in the early 00s, as Republicans pushed a major tax cut under President George W. Bush.

That tax plan was predicated on projections showing a $5.6 trillion budgetary surplus over the coming decade. But a group of legislators led by Sen. Olympia Snowe (R-Maine) were worried: What if those projections were wrong? What if the surplus didn’t materialize. So they backed a proposal favored by Alan Greenspan, who at the time was the head of the Federal Reserve, that would delay tax cuts (and some spending cuts) until the budget was back on track to hit the target.

In an exchange with a Republican lawmaker at the time, Greenspan was asked about the potential for tax hikes in an economic downturn. What if, at that moment, Congress felt that tax cuts were called for instead? “Sure,” Greenspan said, “but there’s nothing to prevent the Congress at that point from doing that.”

The trigger didn’t make it into the final law. But Greenspan’s response gets at the reality with any trigger mechanism: A trigger doesn’t bind Congress or force it into action. Lawmakers can always ignore or override the automatic actions.

That is what happened in the 1980s, when Congress imposed a deficit trigger as part of a budget process reform. Passed in 1985, the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act came in the wake of record federal deficits. It wasn’t precisely the same as the Greenspan proposal or the one we’re seeing now, but it was, essentially, an attempt to control the budget via trigger: If budget deficits exceeded yearly targets, spending reductions would automatically kick in.

An initial version of the law was tossed out in court, but a new one was eventually passed, with a new timeline and budget targets. As Steve Bell, who was the senior budget adviser to Senate Republicans when the law was passed, said in a 2006 Senate history, “Gramm-Rudman-Hollings was so contrary to the culture and the Constitution and whole flow of legislative history, the first thing we did was to ignore it.” The annual deficit exceeded the target every year, yet as The New York Times reported, the White House and Congress avoided ever making the called-for cuts “by fudging the numbers and moving the deficit goal posts.”

The trigger was little more than a punt to future budget gimmicks. Congress didn’t want to make the cuts, so it didn’t. There’s no reason to think that a tax-based trigger would be more effective now.

At least, that is, if you judge effectiveness by deficit management. Gramm-Rudman-Hollings didn’t solve the problem of a high deficit. But it did solve the problem of legislators wanting to appear to be doing something about the nation’s fiscal situation.

The trigger, if it ends up in the current legislation, would likely work in the same manner, solving a political problem while proving ineffective — and possibly counterproductive — as a policy measure.

It would create the appearance of accountability, not only to the public, but to Republican legislators themselves, many of whom are uncomfortable with parts of the tax bill yet feel intense pressure to pass major tax legislation anyway. In that sense, the trigger may be best understood as a vehicle for politically convenient self-deception, allowing Republicans who don’t care very much about the deficit and those who say they do to support the same legislation. It is a provision designed to let Republicans fool themselves.

Republicans end up gravitating towards elaborate policy charades like this in large part because they have declined to consider significant spending reductions along with tax cuts. They want tax cuts but not spending cuts, and want to limit the impact on the deficit at the same time. The trigger helps maintain the illusion that this combination possible. It is not really an accountability measure or a budgetary backstop. It is another self-deceiving budget gimmick in a bill that is already full of them.

“Is Chief Justice John Roberts a secret liberal?” asks the provocative headline attached to an article at FiveThirtyEight. Spoiler alert: The article is dumb and the answer is “no.”

According to FiveThirtyEight‘s Oliver Roeder, while it is “relatively early in Roberts’s Supreme Court career…he is beginning to fit the historical pattern, at least quantitatively, of an ideological defector.”

What’s the evidence of this alleged defection? Here is a representative sample of Roeder’s argument:

The case for a liberal John Roberts starts with his 2012 decision that determined the fate of the Affordable Care Act. The chief justice was widely expected to vote to kill the law—the crown jewel of the Democratic president whom he’d sworn into office three years earlier. Instead, he performed some contorted judicial yoga, declaring that the law’s individual mandate was a constitutionally allowed tax, siding with the liberal bloc and saving Obamacare.

You may have noticed that Roeder makes a foundational error at the outset. He confuses the outcome of a case with the legal reasoning that led to that outcome. The problems only grow from there.

In a manner of speaking, yes, National Federation of Independent Business v. Sebelius does count as a “liberal” win, because the liberal Obama administration won. But why did the liberal side win? What did the Court actually say in its decision?

Before I get into that, let me go back to Roeder’s assertion that “the chief justice was widely expected to vote to kill the [health care] law.”

Not everyone back then was so sure that Roberts would “kill the law.” Seven months before the Supreme Court heard oral arguments in the Obamacare case, I wrote the following: “Roberts may very well uphold the health care law as an act of judicial restraint.”

I wrote that because it seemed to me that Roberts came from the school of legal conservatism that puts serious stock in the doctrine of judicial restraint, or judicial deference—the idea that judges should defer to the democratic branches of government whenever possible, nullifying duly enacted laws on only the rarest of occasions. As the conservative legal icon Robert Bork liked to put it, “let the majority have its way.” It also seemed to me that this deferential doctrine was going to play an important role in the looming SCOTUS showdown over heath care and that Roberts would be the one to watch on that front.

So why did the liberal side win the case? Or, more accurately, why did the conservative chief justice vote to uphold the health care law?

Here is what Roberts had to say for himself: “It is not our job to protect the people from the consequences of their political choices.” In short: Roberts made the familiar argument for judicial deference.

As it happens, Roberts did the same thing in 2015 when he urged judicial deference to Congress in the follow-up Obamacare case King v. Burwell (“in every case we must respect the role of the legislature”). Roberts did it again in 2015, when he urged judicial deference to state legislatures in the gay marriage case Obergefell v. Hodges (“this Court is not a legislature”). In the Obamacare case, judicial deference meant that the “liberals” won. With gay marriage, judicial deference would have meant a win for the “conservative” side. Once again, the outcome of a case is one thing; the legal reasoning behind it is something else.

To summarize, Chief Justice Roberts is not an “ideological defector.” He is a legal conservative who has a habit of invoking judicial deference, which is an idea that he and many other legal conservatives have been championing for years. There is nothing “secret” about this.

A Michigan man claims that when he tried to pay a parking ticket in Royal Oak with pennies, a court officer responded by choking him. The attack led him to defecate, he says.

The alleged assault was caught on surveillance tape. An attorney for Anthony Sevo says he intends to sue.

“I don’t think anyone paying in penny rolls, whether it’s a preferred thing to do for a court clerk, warrants this type of this assaultive behavior and violation of constitutional rights,” the lawyer told Fox’s Detroit affiliate.

The ticket was for just $10. Sevo said he was willing to pay with a credit card, but balked at the processing fee of $1.75—17.5 percent of his fine. By comparison, a 2013 settlement between credit card companies and businesses limited the “swipe fee” merchants could charge to 4 percent.

If Royal Oak officials are worried about an influx of coin payers, it can buy an industrial coin counter for about $400. Otherwise, for the occasional coin payment far cheaper options are available.

Coin and currency are legal tender for debts, public charges, and taxes. In Pennsylvania a few years ago, one small town learned that the federal regulation it was invoking to reject coin payments had in fact expired half a century earlier.

As petty as trying to pay a $10 fine in pennies might be (and as far as paying with pennies goes, that’s relatively mild—this year a Virginia man tried to pay $3,000 worth of car taxes in pennies), the government’s actions are pettier. But why would anyone expect any different? The residents of Royal Oak don’t have a choice of government. Sure, they can vote every few years, but the local bureaucracies remain in place irrespective of who wins.

The 44th District Court, where the incident happened, doesn’t have to worry about customer service because there’s no competitive pressure. Whether or not you’re satisfied with them, you’re going to have to pay your fines there, and take it.

The City of Los Angeles is mulling a $67.4 million handout to the New York–based developer Lightstone to build a 1,000-room hotel complex in the city’s downtown.

According to an economic analysis commissioned by the city, Lightstone’s project faces a $67.4 million “feasibility gap” were the project to try solely on private capital. Rather than take this as a sign that the project is well, infeasible, the city has decided to make up the difference.

Under the terms of a rough agreement approved by the city council’s Economic Development Committee, L.A. would pay Lightstone the money over a 25-year period once construction is completed. In return for this support, Lightstone promises the hotels will achieve and maintain an impressive 3-star rating from AAA and will provide a “Community Benefits Package” that includes hiring locals, paying a living wage, and offering room block agreements for conventions and the 2028 Olympics.

City officials claim the subsidy is needed because there aren’t enough hotel options near L.A.’s publicly owned convention center. “The biggest complaint we get from people who want to bring conventions to Los Angeles are the number of hotels within walking distance of the convention center and the variety of price points for rooms,” Doane Liu, executive director of the city’s Department of Convention and Tourism Development, told the Los Angeles Times.

The city claims that the hotel will actually make money for taxpayers. In 25 years of operation, the complex’s three hotels are supposed to generate $494 million in nominal tax revenue, or $160 million in today’s dollars. But such promises always accompany big public payouts to hotel developers—and almost always fail to come to fruition.

For an example, look to Phoenix, Arizona. In 2005, the Downtown Phoenix Hotel Corporation—an arm of the Phoenix city government—borrowed $350 million to construct a 1,000-room Sheraton Hotel in the city’s downtown. As with the prospective Lightstone deal in Los Angeles, the Sheraton project was supposed to breathe life into Phoenix’s convention center by providing much needed hotel rooms to the downtown area. Instead, both convention attendees and hotel occupancy rates plummeted when the Sheraton opened in 2009, and the hotel required $47 million in further subsidies to stay afloat. This year Phoenix agreed to sell the hotel for a $200 million loss.

The City of Los Angeles is protected from a loss on that scale because it will not directly own the Lightstone project and because it isn’t offering as big a subsidy for its construction. But that does not make it a wise use of taxpayers’ funds.

The fact that private investors are not willing to fully fund the project as currently conceived implies that there are higher-value uses out there for that scarce capital, uses that could yield more benefits to Los Angeles residents than greater foot traffic to the city’s convention center. The same can be said for the public money Los Angeles is willing to invest, which could go to much more valuable uses than building more $225-a-night hotel rooms.

The full Los Angeles City Council is set to vote on the financial aid package this Friday.

Although far from true libertarian tax reform, there are elements of the House and Senate plans worth cheering, Veronique de Rugy writes.

The House version goes after a large number of tax exemptions, breaks, credits and deductions that make our code so complicated and unfair. It takes some significant steps to reduce the mortgage interest deduction. It also gets rid of most—with the exception of a $10,000 deduction—of the state and local tax deduction (SALT). Pretty impressive moves considering ending tax deductions is usually where tax reform goes to die.

The House plan doubles the standard deduction creating further simplification as dramatically fewer taxpayers will have to itemize their taxes.

The Senate plan also doubles the standard deduction (an estimated 90 percent of filers making under $200K would now claim the standard deduction). It gets rid of SALT entirely, but is more timid on the mortgage interest deduction. Moreover, it preserves many of the tax breaks with which the House dispenses. And rather than making the tax changes permanent, it includes a sunset date of 2025 reverting the standard deduction, the estate tax, the child tax credit, SALT, the pass-through deduction, and individual tax rates back to 2017 levels. While these changes over the House bill makes it more politically palatable, it means that simplification takes a back seat.

View this article.

The war on drugs comes with a big price tag in Philadelphia. The city is spending millions to settle more than 300 lawsuits stemming from the local narcotics unit’s misbehavior.

Many of the suits can be traced to the acts of one policeman. In 2013 the FBI arrested Jeffrey Walker, a veteran officer who confessed to planting drugs in a dealer’s car and then stealing money from him. He later testified against fellow members of the unit and has served prison time.

Walker was a narcotics officer for 14 years. The courts have thrown out scores of cases involving him or other officers he implicated, and the suits against the city are piling up. But as expensive as the lawsuits are proving to be, the bigger price paid goes beyond taxpayers’ money: People may have served time for crimes they didn’t commit.

Take Marcia Hintz. She was raising her grandchild and holding down a job working with mentally challenged adults when police arrested her in September 2006, saying she had sold Xanax pills to an undercover agent. Hintz testified in her own defense, claiming that the drugs found in her house were prescribed to her longtime live-in friend. A policeman testified against her.

“He was a cop,” Hintz told The Philadelphia Inquirer. “Who are you going to believe?”

Hintz served three years of a five-to-10-year sentence. Her case was eventually thrown out, along with around 1,000 other cases. The city awarded her $625,000 to compensate for her years behind bars.

Kareem Torain was arrested for drug possession in 2001. He rejected a plea deal that may have netted him a sentence of just three years, figuring he would never be convicted for something he didn’t do. Instead, the court sentenced him to 12 and a half to 22 and a half years in prison. He served 13 years before Walker admitted the drugs at the scene were planted and the evidence to justify the warrant largely fabricated. The case was thrown out, and Torain is now seeking $1.8 million in compensation.

The scandal has led to criminal charges as well as civil suits. In 2015, six Philadelphia cops stood accused of assaulting and robbing drug suspects. Walker testified against them, as did 19 of the officers’ alleged victims. But the jury wasn’t convinced by the testimony of percieved drug dealers and a disgraced policeman. The six officers were acquitted, and five returned to active duty.

Even before Walker’s arrest, scandals were brewing in the Philadelphia Police Department. The Inquirer won a 2010 Pulitzer Prize for its series “Tainted Justice,” which documented corruption in the narcotics unit. And the revelations continue unabated today. In August a member of the narcotics unit confessed to trading drugs in exchange for sex. Just in the last couple of weeks, a Philadelphia officer was arrested for selling heroin and cocaine bought from members of the Baltimore police force.

According to a joint investigation by the Inquirer and the Philadelphia Daily News, the city has paid $2 million is suits stemming from the narcotic cases so far and expects to pay around $8 million more in the cases to come.

Senate Intelligence Committee Chairman Richard Burr (R–N.C.) is attempting to insert a bill authorizing warrantless domestic surveillance into must-pass end-of-year omnibus legislation.

Burr’s bill reauthorizes Section 702 of the Foreign Intelligence Surveillance Act (FISA) Amendments. These amendments (and their secretive FISA court) allow the secret surveillance of foreign targets outside of America’s borders without the use of warrants. They have grown increasingly controversial because the surveillance has also scooped up untold (as in, not publicly revealed) amounts of domestic communications, and that information is being used for domestic crimefighting purposes. This puts the program at odds with the Fourth Amendment’s protections against unwarranted searches.

Section 702 will expire at the end of the year unless Congress acts. There are several bills in play to renew Section 702 with various levels of protections against unwarranted domestic surveillance. (Not familiar with them? Check out my primer from last week.)

Burr’s bill is flat-out the worst of the lot. It openly authorizes the use of Americans’ communications collected without a warrant for a host of domestic crimes. It also authorizes the use of “about” searches, where intelligence officials access communications that merely reference a target, not just communications to or from that target.

Ordinarily Burr’s bill would have no chance of passing. Too many legislators in both parties, particularly in the House, are opposed to such measures for them to get through under normal circumstances. But I’ve previously warned that Burr and Senate leadership might try to add this reauthorization to a massive end-of-year bill that has to be passed to keep the government functioning. And Burr now tells The Hill that that’s exactly what he’s going to try to do:

House lawmakers have characterized Burr’s legislation as dead on arrival in the lower chamber, where there is a larger group of reform advocates—but Burr dismissed those concerns Tuesday.

“I heard that argument before we marked up and I think we found language that accommodated everybody’s belief that this didn’t just leave unfettered access to this information,” he said. “Some of that is still rough around the edges but the architecture is there.”

Close watchers of the debate have long speculated that Senate Majority Leader Mitch McConnell (R-Ky.) may follow a version of the playbook he used in a failed 2015 bid to pass a clean reauthorization of the Patriot Act—wait for the House to go first, then try to pass a clean renewal at the last minute in an attempt to jam it through the lower chamber.

That trick didn’t work, thanks in part to filibustering from the likes of Sens. Rand Paul (R-Ky.) and Ron Wyden (D-Ore.). Paul and Wyden are currently teaming up to push a rival piece of legislation, so don’t expect them to be any more deferential to unwarranted surveillance this time.

When part of the PATRIOT Act expired, we ended up with the compromise USA Freedom Act, which authorizes warrantless collection of metadata from Americans but places significant limits on officials’ ability to search and access that metadata. Similarly, there is a compromise Section 702 reauthorization bill called the USA Liberty Act. The House bill has wide enough exceptions, surveillance experts say, that intelligence officials could easily bypass restrictions and continue to access domestic communications. Right before the Thanksgiving holidays, some senators released a version of the USA Liberty Act that tightens up those exceptions and made the warrant demands stronger.

Burr recognizes that a compromise is going to have to happen again, but he believes his bill is going to be the framework and that there’s absolutely no chance that stricter warrant requirements are going to be part of the final reauthorization.

Burr, obviously, is no disinterested observer. He wants to sell the idea that his bill is the only one that can make it through the Senate, regardless of whether that’s true. That just makes it all the more important to stay on top of this Section 702 debate, and for privacy and civil liberties groups to warn about the dangers of bills like Burr’s.

A final reminder: Reason has been on the federal surveillance beat for years now, helping readers stay informed about exactly how this domestic snooping violates our privacy. If all this reporting has been useful to you, consider a contribution to our webathon. We take bitcoins!

What lessons might Winston Churchill have for today’s political climate in America?

A. Barton Hinkle writes:

“I’ve never in my adult life,” observes David French, a writer for National Review, “seen so many people so angry about things they cannot control.” The current hour is one of “defining people by their mistakes,” he says, and “hating our ideological enemies.”

This is not new information. Many others across the ideological spectrum have uttered the same lament. But the laments have not diminished the volume of rage.

To some degree the rage is understandable. People have plenty to be angry about. But much of the animosity seems out of all proportion. It is one thing to despise and vilify a foreign tyrant who tortures innocent children. It is something else again to despise and vilify someone who didn’t vote for the same political candidate you did. You have to take politics extremely seriously for that.

But as serious as politics might seem today, it cannot be more serious than it was in Britain in 1940—when the wrong political choices could threaten the nation’s very existence.

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